And this brings me to what I referred to earlier as a reaffirmation of my views on the basic problem confronting the underdeveloped countries. The principal insights, which must not be obscured by matters of secondary or tertiary importance, are two. The first is that, if what is sought is rapid economic development, comprehensive economic planning is indispensable… if the increase in a country’s aggregate output is to attain the magnitude, of, say, 8 to 10 per cent per annum; if in order to achieve it, the mode of utilization of a nation’s human and material resources is to be radically changed, with certain less productive lines of economic activity abandoned and other more rewarding ones taken up; then only a deliberate, long range planning effort can assure the attainment of the goal…
The second insight of crucial importance is that no planning worth the name is possible in a society in which the means of production remain under the control of private interests which administer them with a view to their owners’ maximum profits (or security or other private advantage). For it is of the very essence of comprehensive planning for economic development - what renders it, indeed, indispensable - that the pattern of allocation and utilization of resources which it must impose if it is to accomplish its purpose, is necessarily different from-the pattern prevailing under the status quo… (xxviii-xxix, Foreword to 1962 printing) The Political Economy of Growth, Paul A. Baran [emphasis added]
It is surely of some interest that the late Professor Baran-- reassessing his important, insightful, and extremely influential 1957 book, The Political Economy of Growth-- grounds his contribution to the liberation of the post-colonial world in two “insights”: 1. The necessity of “comprehensive” economic planning over the irrational decision-making of the market, and 2. The impossibility of having effective planning with the major productive forces in the hands of private entities operating for profits.
Put simply, Baran is arguing that the most promising humane and rational escape from the legacy of colonialism is for the developing countries to choose the socialist path going forward and adopt planning as a necessary, rational condition for achieving that goal.
It is of equal interest that many who consider Baran to be one of the fathers of dependency theory-- the theory that development is most significantly hindered by the state-to-state structural barriers imposed by the “core” on the “periphery” or the “North” on the “South” -- have abandoned Baran’s key “insights” for an approach that argues for open, unhindered “fair” exchange and the rationality of markets.
For many of today’s Western left, the locus of international inequalities is found in the economic relations between states. Exploitation-- in the form of taking advantage of uneven development or resource differences-- undoubtedly occurs in the relations between states, systematically in the colonial era, more indirectly today. That is just to say that competition between capitalist states within a global imperialist system will produce and reproduce various inequalities. It is popular to capture this as conflict between an advantaged North and a disadvantaged South-- while the geographical reference is most inexact, it is widely understood. From Wallerstein, Arrighi, and Gunder Frank, through Amin, and an important consensus today, the central feature of imperialism is thought to be the vast differences in wealth between the rich and poor countries. Moreover, they share the belief that existing structures maintain those differences, structures established and protected by the richest countries.
Of course, they are right to object to these inequalities and the practices and institutions that preserve them. And Paul Baran was acutely aware of these structures, but also attendant to the specific historical conditions influencing the individual countries-- their differences and similarities. He understands the trajectory of the post-colonial states:
Thus, the peoples who came into the orbit of Western capitalist expansion found themselves in the twilight of feudalism and capitalism enduring the worst features of both worlds, and the entire impact of imperialist subjugation to boot. To oppression by their feudal lords, ruthless but tempered by tradition, was added domination by foreign and domestic capitalists, callous and limited only by what the traffic would bear. The obscurantism and arbitrary violence inherited from their feudal past was combined with the rationality and sharply calculating rapacity of their capitalist present. Their exploitation was multiplied, yet its fruits were not to increase their productive wealth; these went abroad or served to support a parasitic bourgeoisie at home. They lived in abysmal misery, yet they had no prospect of a better tomorrow. They existed under capitalism, yet there was no accumulation of capital. They lost their time-honored means of livelihood, their arts and crafts, yet there was no modern industry to provide new ones in their place. They were thrust into extensive contact with the advanced science of the West, yet remained in a state of the darkest backwardness (p. 144).
At the same time, Baran is fully aware of the predatory nature of foreign capital, denying its “usefulness” and affirming its sole domestic benefit to the merchant class.
Perhaps his clearest statement of the logic of imperialism appears on pages 196-197:
To be sure, neither imperialism itself nor its modus operandi and ideological trimmings are today what they were fifty or a hundred years ago. Just as outright looting of the outside world has yielded to organized trade with the underdeveloped countries, in which plunder has been rationalized and routinized by a mechanism of impeccably ‘correct’ contractual relations, so has the rationality of smoothly functioning commerce grown into the modern, still more advanced, still more rational system of imperialist exploitation. Like all other historically changing phenomena, the contemporary form of imperialism contains and preserves all its earlier modalities, but raises them to a new level. Its central feature is that it is now directed not solely towards the rapid extraction of large sporadic gains from the objects of its domination, it is no longer content with merely assuring a more or less steady flow of these gains over a somewhat extended period. Propelled by well-organized, rationally conducted monopolistic enterprise, it seeks today to rationalize the flow of these receipts so as to be able to count on it in perpetuity. And this points to the main task of imperialism in our time: to prevent, or, if that is impossible, to slow down and to control the economic development of underdeveloped countries.
Notice that Baran acknowledges, along with today’s fashionable dependency theory, that imperialism’s “main task” is to impose underdevelopment. But imperialism’s agent is identified as the “monopolistic enterprise” and not specifically an antagonistic state or its government. Of course, the state hosting monopoly corporations does all it can to promote and protect their interests, but it should not be confused with either the exploiter or the beneficiary of exploitation: it is “the well-organized, rationally conducted monopolistic enterprise” that bleeds the workers of the developing countries. With monopoly capitalism dominating the state, the state plays a critical, essential role as an enabler for the most powerful monopolies in the global economy.
For Baran, the key to liberating the former colonies from the stranglehold of rapacious monopolies is not a reordering of international relations, not a campaign for a level international playing field, not alternative market institutions, nor a coalition of dissenters from the status quo, but a radical change in the social and economic structure of the oppressed country.
In this regard, Baran differs from many contemporary dependency theorists who pose multipolarity as an answer to the North-South inequalities and welcome the BRICS development as constituting an anti-imperialist stage. They believe that breaking the stranglehold of the dominant great power-- the US-- will somehow eliminate the logic of contemporary imperialism, that it will disable the “mechanism of impeccably ‘correct’ contractual relations” at the heart of “core” / “periphery” relations.
But this is not Baran’s thinking. He opts instead for an active engagement of the workers, peasants, and intellectuals on the periphery. His is a class approach. For Baran, working people are not dried leaves, blown this way and that by the powerful winds of great powers. Rather, they are the agents of their own liberation.
Baran draws out the potential of the post-colonial masses through his innovative concept of “surplus.”1 Baran asks revolutionaries in the emerging countries to realize the potential surplus that they may access for development provided that they engage in a “reorganization of the production and distribution of social output” and accept “far reaching changes to the structure of society.” (p. 24). Baran emphasizes four available sources for the surplus:
One is society’s excess consumption (predominantly on the part of the upper income groups…), the second is the output lost to society through the existence of unproductive workers, the third is the output lost because of the irrational and wasteful organization of the existing productive apparatus, and the fourth is the output foregone owing to the existence of unemployment caused primarily by the anarchy of capitalist production and the deficiency of effective demand. (p. 24)
By recovering this surplus, Baran contends that the post-colonial world can begin “the steep ascent” -- the escape from the legacy of colonialism and the stranglehold of capitalism. At the same time, Baran concedes that a resource-poor country, an economy violently distorted by a close neighbor-- a country like Cuba-- will need assistance from the socialist community, an assistance that has been less forthcoming since the demise of the Soviet Union.
The Multipolaristas and the BRICS advocates do not share Baran’s confidence in working people. They cannot conceive a revolutionary answer to the problem of development. They relegate socialism to the far, far-off future, and argue for a more humane capitalism. Their vision ends with establishing a new regime of “structural adjustments” that will blunt the economic power of the US to make way for a plurality of powers competing for global markets, but in a “friendly” way. This is the social-democratic vision taken to the global level. But this is not Baran’s vision.
Like their national counterparts, these global social democrats envision a world in which reforming capitalist social relations-- taming the worst monopoly scoundrels-- will result in the proverbial arc bending toward justice. BRICS, they believe, will give us a level playing field for the monopoly corporations to roam more fairly.
*****
Is Baran’s 1957 (1962) recipe for development relevant to today’s world? Could the so-called global South escape the clutches of the imperialist system by applying the “insights” offered by The Political Economy of Growth?
A recent Oxfam report on inequality in Africa suggests that there is plenty of potential surplus available for building a developmental program based on a class-based approach of appropriation and surplus recovery:
● Africa’s four most affluent billionaires have $57.4 billion in wealth, which is greater than ~50% of the continent’s 1.5 billion people.
● While Africa had no billionaires in 2000, today, there are 23 with a combined wealth of $112.6 billion. The wealth of these 23 ultra-rich Africans has grown by 56% in the last 5 years.
● The richest 5% on the continent have accumulated almost $4 trillion in wealth, more than twice the wealth of the rest of the people in Africa (by comparison, the richest 10% of US households hold two-thirds of US wealth).
● Almost half of the world’s most unequal countries are in Africa.
● The bottom 50% of Africans own less than 1% of the wealth of the continent (by comparison, the bottom 50% of US households own 3% of US wealth).
Presumably, the report does not include the billionaires like Elon Musk, Patrick Soon-Shiong, Rodney Sacks, and many others who relocated and invested outside of Africa. Eight of the top foreign-born US billionaires are from Africa.
Clearly, class, and not state-to-state relations, is at the center of Africa’s human development problem. The “potential surplus” accumulated in the hands of so few would well serve a peoples’ development program that could reverse the concentration of wealth now starving the continent’s poor. Appropriated wealth could well serve an industrial drive and the rationalization of agriculture. More than enough wealth is available in Africa to implement Paul Baran’s twin insights that open this article.
The BRICS movement-- a coalition of partners aligning to create a different international exchange network that would be less one-sided, less privileging wealthy nations-- is not itself a bad thing. The proverbial level playing field-- the fair and free marketplace-- is a proper goal for capitalist participants competing internationally. But it is not a Left project. It moves the goal no closer in the struggle for justice for working people. It is not class-partisan, and thus ultimately will likely benefit those who gain from the proper functioning of capitalist economic relations in the various countries disadvantaged by existing relations. And we know from the Oxfam report who they are.
One can see the limitations of multipolarity from the recent Rio de Janeiro meeting of BRICS leaders. There is much talk of a “more equitable global order,” of state-to-state “cooperation,” of broader “participation,” even a pledge to fight disease and extreme poverty. The foreign ministers and heads of state dutifully denounce war and aggression. The current President, Luiz Inácio Lula da Silva “called BRICS a successor of the Non-Aligned Movement (NAM).” What he didn’t say was that NAM broke up when Cuba transcended toothless resolutions and declarations and actually defended Angola against apartheid South African aggression in a bloody war that brought the criminal regime to its knees. The BRICS response to the attack on Iran brings “toothlessness” back to mind.
Baran’s revolutionary path is not an easy one. Others have tried and failed. From Nkrumah and Lumumba to Thomas Sankara, revolutionaries in Africa have taken steps in this direction, only to be thwarted by powerful forces determined to snuff out even a beginning. That alone should tell the EuroAmerican left that it is the path worth following.
We should not pretend that reforming global market relations—any more than reforming national market relations-- will secure justice for working people. That will come when the workers, peasants, and intellectuals of the global South decide that justice is impossible while “the means of production remain under the control of private interests which administer them with a view to their owners’ maximum profits.”
1 While useful in this context, the concept of surplus is less successful as developed in Baran and Sweezy's 1966 work, Monopoly Capital.
Greg Godels
